Tuesday, October 20, 2009

Examining wage gaps in Latin America

A new study from the Inter-American Development Bank examines wage gaps between ethnic groups and genders. The bank says that the study's findings suggest that education must improve for ethnic minorities in Latin America.

According to the findings, Afro-descendants and indigenous people earn 28 per cent less than their white peers; males earn 17 per cent more than females when both have the same age and level of education; and education is key to reducing ethnic wage inequalities in the region.

In an unprecedented analysis of household data from 18 nations in Latin America, the study found that women and ethnic minorities are clearly at a disadvantage, an IDB news release said.

Females earn less

Females in the region earn less than their male counterparts even though they are more educated. A simple comparison of average wages indicates that men earn 10 per cent more than women. But once economists compare males and females with the same age and level of education, the wage gap between men and women is 17 per cent.

For seven countries where ethnic data is available, the study found that indigenous and Afro-descendant minorities earn on average 28 per cent less than the white population in the region, when individuals have the same age, gender and level of education. It considered “minorities” people who declared themselves in household surveys as indigenous, black or brown, or speakers of an indigenous language. Despite being the majority in some countries of the study, these groups are considered “minorities”.

The paper provides evidence that the region still faces major challenges in eradicating disadvantages in labour markets based on characteristics like gender or ethnicity.

“Polices aimed at reducing these inequalities are still lacking. This is more than just a moral necessity. It is an essential strategy to reduce poverty in the region,” said IDB economist Hugo Ñopo, the lead author of the study.